Premier Wen Jiabao joins leaders wearing traditional local dress before an East Asia Summit dinner in Bali, Indonesia, Nov 18, 2011.[Photo/Agencies]

BALI / BEIJING - Premier Wen Jiabao on Friday assured Southeast Asian nations that Beijing has no aggressive intentions as it launches several measures to press ahead with regional cooperation despite territorial disputes in the South China Sea.

"China will never seek hegemony and we are against any hegemonic behavior," Wen said when addressing an annual summit of China and the 10-nation Association of Southeast Asian Nations (ASEAN) on the resort island of Bali.

"China will forever be a good neighbor, good friend and good partner of ASEAN," Wen added.

His remarks came against the backdrop of escalated tensions this year in the South China Sea, where China, Vietnam, Malaysia, the Philippines and Brunei hold overlapping claims over disputed waters.

Washington has also tried to step in, with the White House saying US President Barack Obama is to take the issue to the East Asia Summit scheduled on Saturday. Obama, who has recently stressed a foreign policy pivot to Asia, is the first US president to attend the regional forum.

The US has argued that it holds a stake in the security of commercial lanes in the South China Sea, but Beijing said the fact is that there have been no problems in that regard for a few decades.

"External forces should not use any excuse to interfere," Wen said on Friday, adding the South China Sea issue should be resolved by "relevant sovereign states through direct consultation".

Wen announced that Beijing will establish a China-ASEAN maritime cooperation fund of $473 million. 

The fund will start in fields such as marine research, navigation safety as well as search and rescue, and finally forge a multilevel and comprehensive mechanism, said the premier.

He also announced plans to set up a China-ASEAN committee on connectivity to speed up infrastructure construction linking China and the region.

In addition, China will offer ASEAN another $10 billion in loans, on top of a pledge of $15 billion of loans made two years ago.

Another priority is to enhance East Asia's ability to ensure regional financial stability amid global financial turmoil, he said.

"China and ASEAN should be both confident and sober-minded and keep our destiny firmly in our own hands."

Wen's remarks were well received by ASEAN officials. Indonesian Foreign Minister Marty Natalegawa told reporters that on the South China Sea issue China sent positive signals about further discussing the legally binding code of conduct for the waters.

"I think this is an important development," Natalegawa said.

Malaysian Prime Minister Najib Razak said in an article published in the Jarkarta Post on Friday that nowadays intertwined economies have demanded his country to "reject the outdated notion of taking sides" on major powers but "opting instead for a new multilateralism that works both for Malaysia and for our partners overseas".

"Fifty years ago Malaysia was just a spoke in the international wheel but today we are at its hub - we are connected to the US, but we are also connected to China, to Europe, to the Middle East and to Africa," he wrote.

Trade volume between China and ASEAN is likely to exceed $350 billion this year, Wen said. China has become ASEAN's top trading partner, while ASEAN ranked third in China's trading list.

Assistant Foreign Minister Liu Zhenmin told reporters China-ASEAN trade is likely to reach $500 billion in five years.

"Wen's gesture reflects China's active response to ASEAN's maritime issues," said Lu Jianren, an Asia-Pacific Research Center expert at the Chinese Academy of Social Sciences. Resolving these issues peacefully will help ease regional tensions created by Washington's recent aggressive moves, he said.

Singapore, Malaysia and Indonesia have said they are wary of the strengthening of the US military's presence in northern Australia, a plan Obama announced earlier this week.

"Their military fleets would very likely go back and forth through our waters, given the analysis that the planned base will have to conduct due to rising tensions in the South China Sea," Agus Suhartono, Indonesian Navy's former chief of staff, was quoted as saying by the Jakarta Post.

On Friday, Wen also attended a summit with Japanese Prime Minister Yoshihiko Noda and South Korean President Lee Myung-bak. Wen and Lee had one-on-one talks.

Later that day, Thai Prime Minister Yingluck Shinawatra expressed deep gratitude to Wen for China's help in handling the ongoing flood.

Earlier, China sent $1 million in assistance, an elite expert team led by a deputy minister of water resources, and flood-fighting equipment to help battle Thailand's worst flooding in decades, which has killed at least 562 people.

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